OECD Territorial Reviews: Cape Town, South Africa

The Cape Town city-region, which is the second-largest area in South Africa (4 million inhabitants), reflects the national challenge of creating new economic opportunities while correcting past inequities. Since the end of the apartheid system, Cape Town has benefited from macroeconomic stabilisation and has outpaced the national average growth rate. It has both modernised its traditional strengths in port logistics and developed innovative sectors in tourism, agro-food processing, viticulture, financial and business services. Some of these industries compete successfully on the international market and attract skilled labour and foreign investment.

However, the scale of economic exclusion in Cape Town curbs the spatial and social dissemination of economic growth and reduces the potential of economic drivers. While many of Cape Town’s socio-economic problems and urban-policy challenges – income inequality, high unemployment, informal settlements, housing backlogs, mass transit inadequacies, crime, health disparities – are common throughout South Africa, the long history of apartheid has left the city with a segregated social geography that amplifies many of these daunting challenges. Currently 22% of the population is unemployed and 38% of residents live below the poverty line.

This report identifies the key missing collective goods that could both create externalities for firms and foster a more equitable distribution. It provides a platform for the development of a forward-looking, cross-cutting regional development strategy and proposes new "second generation" governance reforms to consolidate previous achievements and respond to emerging obstacles.

The Territorial Review of Cape Town is integrated into a series of thematic reviews of metropolitan regions undertaken by the OECD Territorial Development Policy Committee. The overall aim of these case studies is to draw and disseminate horizontal policy recommendations for national governments.

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